Investor Alert

Brett Arends's ROI

Sept. 26, 2020, 12:56 p.m. EDT

Your retirement probably won’t be anything like your parents’…and that’s not good news

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By Brett Arends

When are we going to get real about the looming retirement and aging crisis in this country? 

If we don’t do something it’s going to make the COVID-19 crisis look like a walk in the park.

The latest evidence that there’s an iceberg straight ahead comes courtesy of the Transamerica Center for Retirement Studies , which has just published its 20 annual retirement survey of U.S. workers. They commissioned polling company Harris to survey about 5,300 workers. Oh, and most of the data were accumulated last fall and winter—before the crisis struck and made things even worse. Among all the depressing data points, arguably none is more gloomy than the news that 48% of women, and 56% of men, have a serious, well-thought-out plan for dealing with their long-term care needs when they get old.

The plan? “Family and friends.”

No, really.

Amazingly, they say spouses are only half of that as well. They’re genuinely relying on friends, and family members other than spouses, to pitch in, too.

Read: Hope to retire someday? See if you can answer these six simple questions

Cue the sound of palms hitting foreheads in financial planners’ offices across the country.

As someone who once helped provide long-term care to a family member for over a year, let me say: You really don’t want to go there if you can possibly help it.

A report commissioned by the U.S. Department of Health and Human Services found that about 70% of those who reach 65 are going to need long-term care at some point.

Boston-based financial planner Sandra Gilpatrick warns, “You shouldn’t assume your family will live near you to make care easy. They may have their own financial or life struggles making it a major burden or impossible to give care later.”

She adds: “Spouses close in age may think they can take care of each other when they have a conversation at 60. Fast forward to 85 and it is a tremendous physical strain to try to lift someone out of a chair. Giving care can rapidly deteriorate the healthier spouse as well.”

Meanwhile, I don’t want to give you the wrong impression. I don’t want to suggest that the failure to prepare for long-term care needs is the only part of the survey that is alarming.

It isn’t.

Among the men surveyed, the median household retirement savings were…$69,000.

Heavens. A man of 65 with that amount of money can buy a lifetime annuity worth, oh, $330 a month according to  immediateannuities.com . Among the women surveyed, the median household retirement savings were less than half as much, a mere $28,000. Just under a third of the women surveyed had $10,000 or less set aside.

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